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Posted on Tue, Jan 15, 2013 : 5:58 a.m.

Ann Arbor DDA lays out plan to make 2 downtown properties a package deal for redevelopment

By Ryan J. Stanton

The Ann Arbor DDA presented this revised plan for redeveloping five city-owned properties during a special City Council work session Monday night. On the Kline Lot (yellow), the plan recommends a medium-density, mixed-use development with a residential focus and an active ground-floor use. On the Palio Lot (orange), the plan recommends a medium-density, mixed-use development with an office focus. On the Library Lot and Y Lot (blue), the plan recommends high-density, mixed-use development with a lodging or office focus. The plan recommends and active ground-floor use for all five sites, the fifth one being the ground floor of the Fourth and William parking garage, which could be retrofitted.

The Ann Arbor Downtown Development Authority's plan for encouraging private redevelopment of city-owned properties drew mixed reactions from the City Council Monday night.

DDA Executive Director Susan Pollay appeared alongside DDA board members and Todd Poole, a land use consultant hired by the DDA, during a special council work session.

As the first project in the so-called Connecting William Street plan, the DDA recommends the city consider marketing — as a package deal — both the Y Lot at the corner of Fifth and William and the Library Lot above the city's underground parking garage off Fifth Avenue.

Ann Arbor DDA Executive Director Susan Pollay and DDA board member Roger Hewitt at the podium, with other DDA board members in the front row behind them. Beyond, a grass-roots group called the Library Green Conservancy packed the council chambers with residents who want to see a large park developed on the Library Lot.

The plan specifically recommends concentrating on high-density, mixed-use developments with a primary focus on hotel or office uses for both sites. Together, development of those sites could serve as a catalyst for the rest of the sites along the corridor, the plan states.

"The current trend from our market study is that mixed-use is in strong demand — residential, office, retail," Poole said. "Office by itself is probably too risky a proposition today."

To solicit developer interest, the DDA proposes a two-phase process — first releasing a request for qualifications (RFQ), and then releasing a request for proposals (RFP) to select developers.

The DDA plans to make clear that as part of any development agreement, the DDA and city would insist on performance requirements to ensure each site is developed to certain standards.

The DDA intends to bring its RFQ and RFP to the city for approval before distributing them to ensure their completeness and alignment with city goals.

Pollay said the DDA also is looking to hire a real estate expert to make sure the city is getting strong responses when it goes out to the development community.

"And we're looking to use a selection committee that would be comprised of people with expertise — bankers, developers, people who do construction, and so forth — to make sure that whomever we're sending proposals to have the qualifications sufficient to actually go forward," she said.

As that process unfolds, the DDA plans to simultaneously develop a streetscape plan for William Street, including sidewalk and roadway enhancements. That could include bike lanes, pedestrian-scale LED lights, seating and more. The DDA would then work to implement plan elements.

"We're going to continue working at DDA on making that sidewalk area better," Pollay said. "We've got most of the infrastructure in. That's part of what we did with Library Lane. We've got one more small section of sanitary (sewer) that we're going to upsize, but generally everything is in place other than the streetscape, and we're going to continue to work on getting that RFQ to the council."

Council Member Sabra Briere, D-1st Ward, told Pollay she feels rushed by the DDA's willingness to move quickly on to the implementation phase.

"I don't think we have consensus around the table, much less in the community at large, that certain uses belong on certain sites," Briere said.

A grass-roots group called the Library Green Conservancy packed the council chambers with residents who want to see a large park developed on the Library Lot.

Residents hissed and waved signs that read "no" during talks of dense development. Mayor John Hieftje tried multiple times to get the residents to quiet down.

Council Member Sumi Kailasapathy, D-1st Ward, said she's concerned the DDA has "totally ignored" residents who've said they want more parks and open space downtown.

"For me, development doesn't always mean how high we can build and how dense a population is — development for me is more holistic," she said, drawing applause from the crowd.

This map, included in the final version of the DDA's plan, shows existing open space (pink), proposed open space (dark purple), a potential mid-block connection (yellow), and a future greenway (light purple).

SmithGroupJJR

Council Member Stephen Kunselman, D-3rd Ward, received a round of applause from the audience when he expressed disappointment in the DDA's plan, which he called deja vu all over again.

"We've heard all this before," he said. "The RFQ, the RFP — I mean, these things have all been tried and failed, as far as I'm concerned. I was hoping we'd at least get one recommendation that would be 'sell the Y Lot' and I'm not even getting that out of this, so I'm feeling kind of disappointed."

Poole said the idea is to basically entertain a "lead developer" or "master developer" who has the rights and options to develop multiple parcels, depending on how things go with the first parcel.

By packaging multiple parcels, he said, the city is more likely to attract a larger developer who can bring more resources to the table. And it permits the developer to realize certain economies of scale, while also limiting the uncertainty of what might get developed in the area, he said.

"Developers, more than anything, want certainty," Poole said. "They want certainty more than they want incentives. They want certainty more than they want tax breaks."

Poole said Ann Arbor has a reputation among some in the development community as being "radioactive with regard to developers."

"You have to understand, when a developer puts forth a proposal and it's a good proposal, and they're really trying to sell what they're going to do, they've probably put $100,000 or more into proposal," he said. "I know because I've helped them put those proposals together.

"So it is not an easy thing for them to come into a community that has already had unfavorable dealings with the development community."

Kunselman asked why the city wouldn't just put deed restrictions on the Y Lot and the Library Lot and put them up for sale. He frowned upon the suggestion that the city should once again try to partner with a developer, saying "that's one reason why we have this toxic image out there."

"So why would we do that again?" he asked.

Poole used the analogy that the city is in a car that's moving forward, and it can either grab the steering wheel or just go along for the ride and see where it ends up.

"How many times have we gone over the cliff in that car, though?" Kunselman responded, drawing laughs from the large crowd of residents who held up signs opposing the DDA's plan.

Poole said it's his professional opinion that the city would be cheating itself out of value if it decided to sell off the lots it owns downtown, one by one, without a grander plan.

"I don't disagree that you've had some bad breaks in the past," Poole said. "But what I can give you is my professional opinion that to do it in a piecemeal fashion is not going to get you the greatest value you could achieve. And not just money value, but also public benefit value."

Council Member Sally Hart Petersen, D-2nd Ward, echoed one of Kunselman's concerns that the public plaza space recommended for the Library Lot appears too small. Both of them said they want to see it double in size and front Fifth Avenue the full length from Library Lane to Earthen Jar.

Petersen said a plan that showed "the best of both worlds" — development on one side and a large public plaza space along Fifth Avenue — would resonate better with her.

Poole said his market study showed about 500,000 square feet of large floor plate office could be supported in the downtown over the next 10 to 12 years (bringing an estimated 2,500 jobs), along with 1,300 new apartments (in addition to what's already under construction) by 2016.

Poole said he has worked all over from Detroit to Cleveland to New York and Miami and he knows there's interest in building in Ann Arbor.

"I can tell you, developers are clamoring to get in here," he said. "There is no shortage of developers who want to be here. What's preventing them from getting in here is that they don't understand the political landscape enough to know that they're not going to lose their shirt."

Comments

Andy Piper

Sat, Jan 19, 2013 : 1:44 p.m.

I like it, now is the time to get these parcels developed. There is a high demand for housing in downtown that is not met. It's laughable how few housing units there are downtown for young professionals making 40-80k. We have a great opportunity with these lots, I like the proposal.

Ms.U.

Wed, Jan 16, 2013 : 5:41 a.m.

I am always bewildered by the power that DDA has over decisions re downtown projects. I don't remember voting for them, does anyone?
Mayor Hieftje does seem to remember that the denizens of Ann Arbor overwhelmingly opposed the construction proposed for the downtown library lot. Does no one remember that the majority of respondents to a related survey preferred that the space be used asr a public area? Food vendors, winter ice skating, etc. In fact, in all similarly sized cities that I have visited, such an area does exist, and is much used. So compare cities from the point of view of what serves the public the best, not what makes merchants happiest, please!
(BTW, had no one added up the total number of parking spaces within easy walking distance of downtown? Outside of Art Fair days, we seem to have more than adequate parking always.)
Note to the DDA: With each increase in the already exorbitant rents that downtown businesses are asked to pay, more of my favorite shops have either moved or had to shut down. I personally have little reason to go there anymore, nor do many of my acquaintance. More parking is not likely to draw us back...

snapshot

Wed, Jan 16, 2013 : 3:56 a.m.

Poole has it right......Ann Arbor is &quot;toxic ' to developers because the city lacks quality leadership because it's just a good old boy network of friends and coworkers that cater to more friends and coworkers. No real vision or business sense. They live in a dream world. If it wasn't for the financial stability and opportunity that the U of M has provided, these &quot;leaders&quot; would have been run out of town.
That financial stability is being degraded with mismanagement as our tax base continues to erode and more and more financial burden is placed on property owners The DDA needs to go away so taxpayers can hold someone accountable for incompetent management of such valuable city resources.

Chateau Gloria

Tue, Jan 15, 2013 : 8:51 p.m.

Who does the DDA work for? It is obviously not the individual voters in the city. Nor is it anyone who wants to maintain low rise and low density building, or future votersThis plan coupled with the new high rise plans suggest that the DDA works for not you.The DDA, Mayor, and council seem to ork for a cabal of developers rather than any the ordinary citizen. The cabal will do as developers do rape and pillage the city scape and environment for pure profit, certainly not to enhace the liveability of the city.

Jerome

Tue, Jan 15, 2013 : 8:40 p.m.

We need a better Mayor and a better Council. We need representatives who listen to the electorate, and not to just those who line their pockets. Ann Arbor is becoming a shadowy, pedestrian unfriendly, ugly mess. What ever happened to meeting and talking with your friends and community members while out on a nice, safe, quiet stroll through the city? That's what builds &quot;community!&quot; Not another chintzy, money making venture for some out-of-town developer. How again is the citizenry being represented by Susan Pollay and the rest of the DDA team?

Arboriginal

Tue, Jan 15, 2013 : 7:56 p.m.

Close all of the surface parking lots for a month and see how that works out!

Veracity

Tue, Jan 15, 2013 : 7:42 p.m.

DEVELOPERS ALWAYS ARE THE WINNERS !!!
&quot;I can tell you, developers are clamoring to get in here,&quot; he said. &quot;There is no shortage of developers who want to be here..&quot;
Of course not! Developers never lose because they take their 2% (or higher) fee off the top of the financing for each project.
It does not matter if the development goes bankrupt before completion of construction since the developer has his money in his pockets already.
For the same reason it does not matter to the developer if the project becomes a business failure and goes into bankruptcy after its built.
The two things that a developer must do to get his money is to, first, get his project approved by the DDA and City Council. Then he needs to obtain funding from banks and investors.
And if you believe that banks and investors are wise enough to avoid bad projects just consider the $14 million dollar loss that Bank of America and the LaSalle Group took for financing Ashley-Terrace.
If the DDA wants to build a white elephant more than one developer will be interested in getting the fee for its construction. Easy money!

tmc

Tue, Jan 15, 2013 : 6:38 p.m.

Lets see now. More density, mixed use = more people downtown. Nowhere do I see a mention of parking. Oh, wait. Parking has been removed so that more people can live downtown. Go figure!

lou glorie

Tue, Jan 15, 2013 : 5:04 p.m.

Susan Pollay last night described a future for Williams St. that the DDA plan would make impossible. Look at the mapped out development and focus on the sidewalk width. The sidewalks along William would be cowpaths. No room there for &quot;a mother and child stopping to tie a shoe lace&quot; (Pollay's bone thrown to young parents), no room for outdoor cafes, no opportunities for aimless strolling. On these sidewalks, one would need to be constantly on guard to prevent being shoved into the path of a bus.
I wonder why a group that claims to want to save downtown is able to do not much more than create parking and propose projects that would harm its supposed mission. The only reason to bring these buildings as close to the road as possible is to escape being damned as &quot;radioactive to developers&quot;. In fact the DDA is pathetically lacking in any sense that Ann Arbor already is &quot;someplace&quot; and doesn't need to tart itself up in &quot;live, work, play&quot; lame to bring in those developers Mr. Poole claimed were clamoring to build here.
Next, why hire Todd Poole--a consultant from outside Ann Arbor? We have many qualified commercial real estate professionals and the &quot;discipline&quot; of &quot;land use economics&quot; can hardly be called scientific. A local would know the market much better than someone coming from New Jersey. One reason comes to mind. A knowledgeable local might not come up with the right answers.
One last thing. The DDA board and staff are fomenting ageism in this city. They insist their work in destroying this city is being done for young people, that their opponents are doddering, drooling obstructionists hoarding resources and denying youth its place in the sun. If the DDA is sincere, the board should fire the staff and then resign, as it's time for more age diversity. Let's begin the hard work of collaborating for our common future. Perhaps Pollay didn't see the younger people holding up protest signs last ni

Jerome

Tue, Jan 15, 2013 : 8:56 p.m.

Very well said. Ms. Pollay and the DDA Team are disingenuous money grubbers at best. Ms. Pollay would say, &quot;But what about the children?&quot; Oh, please!

lou glorie

Tue, Jan 15, 2013 : 5:08 p.m.

[continued] last night because they were an inconvenient truth.

Stupid Hick

Tue, Jan 15, 2013 : 2:52 p.m.

Poole: &quot;And not just money value, but also public benefit value.&quot;
Perfectly illustrates the DDA cartel members' objectives: how to monetize public resources, oh, and yeah, benefit the public too!

BHarding

Tue, Jan 15, 2013 : 2:49 p.m.

Nice drawing of boxes.
I'm surprised that a plan for a nice little park isn't in the middle of it. That would be the refuge for office workers to bring their lunches and watch life and recharge for the rest of their day. Some could even bring their work, laptops or whatever, out to a table in the sun in summer.Shoppers could sit and rest between errands. Parks add humanity to sterile buildings.

The Picker

Wed, Jan 16, 2013 : 1 a.m.

Isn't the park at Liberty and Division the place to bring your lunch and recharge and watch life? We certainly need more of that!

Veracity

Tue, Jan 15, 2013 : 8:11 p.m.

What office workers?
You are being presumptuous to believe that the speculative building planned by the DDA will create long lines of employers wanting to pay high rental prices so that they can setup their businesses. What enterprises do you know will occupy these buildings when they open?
And do you really think that the DDA thinks anything of humanity?
Uh, heh! Perfect!

Chip Reed

Tue, Jan 15, 2013 : 2:24 p.m.

@Ryan- &quot;developers are clamming to get in here&quot;. Should that be &quot;clamoring&quot;?
(The verb &quot;to clam&quot; is jazzspeak for playing a wrong note on an instrument.)

Ryan J. Stanton

Tue, Jan 15, 2013 : 4:08 p.m.

Yep, thanks for the catch!

Arboriginal

Tue, Jan 15, 2013 : 2:30 p.m.

Clam up you rabble rouser!

Ian

Tue, Jan 15, 2013 : 2:16 p.m.

Hi I'm an Ann Arborite and I value 12 parking spots next to Palio over development and prosperity. And by the way I want to leave a downtown lot vacant (for a &quot;park&quot;) because I'm too lazy to walk two blocks to the diag to lay on some grass.

Alan Goldsmith

Tue, Jan 15, 2013 : 2:14 p.m.

&quot;Residents hissed and waved signs that read &quot;no&quot; during talks of dense development. Mayor John Hieftje tried multiple times to get the residents to quiet down.&quot;
Pretty much the story for the Mayor's recent political life: trying to silence and get anyone who disagrees with him to shut up. Afraid the public and voters are not like your appointees to the DDA. You don't get to fire them if they disagree with you.

Arboriginal

Tue, Jan 15, 2013 : 2:01 p.m.

Two articles today!!!
How many more?

Brad

Tue, Jan 15, 2013 : 1:59 p.m.

It's obvious that the mayor/council have totally lost control of the DDA. Totally and thoroughly. Nobody outside the DDA seems to agree with them, yet they are steaming full speed ahead with plans that nobody wants.
Hey elected officials - will you please put a stop to this before it goes any further and we waste any more money collecting &quot;anecdotal&quot; evidence for a plan that almost nobody seems to want. If you can.

Arboriginal

Tue, Jan 15, 2013 : 12:51 p.m.

Blech...

LXIX

Tue, Jan 15, 2013 : 12:21 p.m.

Like talking to a very tall brick wall.
Council hears their active constituents who emphatically say NO but has an obvious agenda.
Briere didn't say no, she &quot;needs more time&quot;.
Kunselman didn't say no, he wants to &quot;sell&quot;. Especially that costly ex Y lot.
Peterson didn't say no, she just echoed Kunselman.
Kailasapathy didn't say no, she wants to be &quot;holistic&quot; which means &quot;whole-istic&quot; or do it all.
Hieftje didn't say no. Except to the loud public protest in opposition.
The remainder of &quot;representatives&quot; didn't say no. Not even sure they were there.
SCREAM
skr?m
verb - To give a long loud piercing cry
noun - A really really long loud piercing cry
art - famous work by Edward Munch depicting public voice in response to DDA presentations and City Council comments.

Jack Eaton

Tue, Jan 15, 2013 : 5:22 p.m.

&quot;Kailasapathy didn't say no, she wants to be &quot;holistic&quot; which means &quot;whole-istic&quot; or do it all.&quot; You seem to have misunderstood Council Member Kailasapathy's view. She was trying to explain that just developing all of these parcels to their maximum economic potential does not add to the city's quality of life. Rather than maximizing development, we should pursue a holistic view of what is good for our downtown and the city.
I thought her comparison of the DDA experts with the International Monetary Fund's experts was particularly telling. The DDA is trying to educate residents of Ann Arbor about what is best for them. All around the world you can see the adverse impact of the IMF's expertise. I think she sees the same potential for harm to Ann Arbor in the DDA's Connecting William Street recommendations.

sellers

Tue, Jan 15, 2013 : 12:15 p.m.

Put the hotel there and get the area re-developed and continue the attraction to downtown to create an exemplary city in the midwest.
While doing it - throw in a public ice rink/concert garden at the hotel to serve as public entertaining and gathering in the Winter and Sprint,Summer, Fall. Use funds from the sale of the rink to police and maintain the rink.

Veracity

Tue, Jan 15, 2013 : 7:59 p.m.

This dream of yours will never happen.
There is no need for a luxury hotel downtown and it will never be successful, just read Chuck Skelton's feasibility study panning the defunct Valiant Partners Hotel and Conference Center proposal. Conditions unfavorable for a hotel have not changed.
Ann Arbor is already &quot;exemplary&quot; as measured by the number of honors and positive articles published in national periodicals during the last year. Let us treasure what we have in Ann Arbor and not ruin it.